Patent Bill Is Amended to Protect Imaging

Article excerpt

A small provision in a big patent reform bill could make a big difference to the banking industry at the expense of a small patent holder that claims broad rights over the process of creating and storing check images.

An amendment to the bill, which the Senate Judiciary Committee approved Thursday night, would protect financial institutions against infringement claims regarding imaging methods.

A version of the bill that cleared the House Judiciary Committee last week does not include such an amendment. The legislation now goes to the floor of each chamber for further debate, and whether the check-clearing provision, which the financial industry broadly supports, will survive remains an open question.

Broad efforts to reform patent law have been made in recent years only to be snuffed out at the committee level. That changed when a Supreme Court ruling in April raised the standard for granting patents for innovations that stem from "prior art."

The banking industry has been supporting the reform effort, which also would make it harder to get so-called "business method" patents.

Sen. Jeff Sessions, R-Ala., offered the check-clearing amendment during the final markup session Thursday. The amendment says that the enforcement provisions of the patent law will not apply to "the use by a financial institution of a check collection system" found to be infringing on patents held by others.

The provision would apply "to any civil action for patent infringement pending or filed" after enactment of the legislation.

A staff member for the Senate Judiciary Committee said the amendment was adopted by unanimous consent.

The amendment appears to be aimed specifically at DataTreasury Corp., a Plano, Tex., payment processor that has sued 60 banking companies and others involved in image processing. It has signed licensing agreements with such companies as JPMorgan Chase & Co., Diebold Inc., and NetDeposit Inc., an imaging unit of Zions Bancorp.

An aide to Sen. …